EID Parry — Q1 FY26 earnings call

Call held 7 Aug 2025

Management summary

EID Parry delivered a mixed Q1 FY26, managing a turnaround to profitability at the PBT level despite regulatory headwinds in the sugar and CPG segments. While government-mandated release quotas restricted sugar sales volumes, the company benefited from higher realizations and a growing distillery business. Management is now focused on consolidating recent ethanol capex and expanding the CPG footprint into value-added 'brown' sweeteners.

Highlights

  • Turned profitable at PBT level with ₹67 lakhs profit compared to a loss of ₹6.79 crores in the previous year.

  • Sugar segment revenue declined 14% YoY to ₹347 crores, primarily due to lower release quotas from the government.

  • Distillery segment revenue grew to ₹296 crores from ₹263 crores YoY, with sales volumes reaching 413 lakh litres.

  • Average sugar selling price increased to ₹41.99 per kg, up from ₹38.60 per kg in the corresponding quarter last year.

  • Cane costs rose significantly to ₹3,844 per metric ton from ₹3,491 per metric ton due to FRP hikes.

  • Consumer Product Group (CPG) turnover stood at ₹192 crores, a decline of 11% YoY due to sweetener category quota restrictions.

  • Short-term debt increased to ₹461 crores from ₹220 crores YoY, driven by molasses sourcing and working capital needs.

  • Refinery operations in Kakinada produced 2.25 LMT of sugar, showing improved operational performance.

Concerns

  • Government Release Quotas

  • Rising Input Costs (FRP)

Key financials

  1. Sugar Revenue ₹347 Cr -14%YoY
  2. Distillery Revenue ₹296 Cr +12.5%YoY
  3. PBT ₹0.67 Cr
  4. Sugar Selling Price ₹41.99 +8.8%YoY
  5. Cane Cost ₹3,844 +10.1%YoY

What they filed

Q1 FY27: revenue down 3.6%, net profit down 217.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue755 848 814 760 754 −0%770 −9%846 +4%733 −4%
EBITDA-41 -34 88 -31 -50 −22%-41 −21%72 −18%-48 −55%
Net profit28 -146 -232 -28 -286 −1121%-54 +63%-340 −47%-89 −218%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Sugar
    ₹347 Cr Revenue84,000 MT Sales Volume
  • Consumer Product Group
    ₹192 Cr Turnover33% Staples Growth
  • Distillery
    ₹296 Cr Revenue413 lakh litres Sales Volume₹67.59/litre Realization
  • Refinery Operations
    ₹908 Cr Operational Revenue2.25 LMT Sugar Production

Guidance & targets

Capacity

  • Distillery Capacity Capacity · Annual · High confidence 18 crore litres
    Our overall capacity is about 18 crore litres across all our facilities.

    — Abdul Hakeem Ashiq, COO - Sugar & Bio-Fuel

Other

  • Distillery Capacity Utilization Other · Steady state · Medium confidence 90% to 95%
    And the capacity utilization will be about 90% to 95% steady ship provided there are no outliers that hit us from a policy perspective.

    — Abdul Hakeem Ashiq, COO - Sugar & Bio-Fuel

Debt

  • Short-term Debt Debt · FY26 Year-end · Medium confidence ₹1,100 crores
    More or less it will be at the same levels, Rajesh, because if you look at it today, you are looking at about INR 1,100 crores or something. Even at the year-end, we'll be looking at the same.

    — Venkateshwarlu Y, CFO

Capex

  • Expansion Plans Capex · Immediate future · High confidence No expansion
    Not at present. We've just finished up last year our ethanol capex. So, capex cycle is largely concluded. It is a phase of consolidation right now.

    — Muthiah Murugappan, Whole Time Director

Risks & concerns

  • Government Release Quotas

    high

    Lower release order quotas from the Department of Food and Public Distribution significantly reduced sugar sales volumes.

    Management acknowledged

  • Rising Input Costs (FRP)

    high

    Cane costs increased from ₹3,491 to ₹3,844 per MT due to central government FRP hikes.

    Management acknowledged

  • Stagnant Ethanol Pricing

    medium

    No price increase for ethanol in the last 3 years despite rising feedstock costs.

    Both acknowledged

  • Short-term Debt Spike

    medium

    Short-term debt more than doubled YoY to ₹461 crores due to molasses procurement and CPG working capital.

    Analyst acknowledged

Areas of evasion (2)

  • Specific margins between maize and molasses feedstocks.
  • Potential stake sale in Coromandel International to reduce debt.

Q&A highlights

2 direct
Consumer Product Group (CPG) Growth Constraints Direct
The quota is going to be a limiting factor on the sweetener sales, but we have our ways and means of moving around on this. One is by focusing on the browns category, which is not driven by the quotas so much.

Reveals how the company plans to bypass government-mandated sugar quotas by shifting to value-added categories.

Asked by Rajesh Majumdar, B&K Securities

Refinery Segment Strategy and Debt Direct
The refinery business, there is a lot of debt, and this capital has really gone in for debt reduction in order to strengthen the operations of the refinery.

Explains the recent capital infusions into the refinery segment as a debt-reduction exercise rather than expansion.

Asked by Rajesh Majumdar, B&K Securities

Ethanol Pricing and FRP Mismatch Partial
Yes, it's concerning for us that the last 3 years, we have not had a price increase. The FRP of cane, which is our feedstock, keeps increasing year-on-year.

Highlights a major margin risk where input costs (cane) are rising by government mandate while output prices (ethanol) remain stagnant.

Asked by Sanjay Manyal, DAM Capital

2 min read 5 chapters

Detailed narrative

Sugar Segment Faces Quota Headwinds

The sugar segment's revenue fell 14% to ₹347 crores as sales volumes dropped to 84,000 metric tons from 1.05 LMT YoY. This decline was primarily attributed to lower release order quotas from the Department of Food and Public Distribution. Despite the volume drop, average selling prices improved to ₹41.99 per kg, providing some cushion against the 10% rise in cane costs (FRP) which reached ₹3,844 per metric ton.

Distillery and Bio-fuel as Growth Drivers

Distillery revenues rose to ₹296 crores, supported by sales of 413 lakh litres compared to 390 lakh litres in the previous year. Realizations also improved to ₹67.59 per litre. Management highlighted that the ethanol capex cycle is now complete, and the focus has shifted to maximizing utilization (targeted at 90-95%) and managing the revenue mix between ENA and ethanol based on market margins.

Consumer Product Group Strategic Pivot

The CPG business saw an 11% decline in turnover to ₹192 crores, largely due to sweetener category quotas. However, the staples segment showed robust growth of 33%. To counter quota limitations, the company is focusing on the 'browns' category (value-added sugars) and expanding its numerical distribution, which currently stands at approximately 2 lakh outlets.

Refinery Operations and Debt Management

Refinery operations in Kakinada reported a positive PBT of ₹67 lakhs, a significant improvement from the ₹6.79 crore loss in the prior year. Operational revenue stood at ₹908 crores. Management clarified that recent capital infusions were directed toward debt reduction in the refinery segment. Short-term debt for the company rose to ₹461 crores, driven by forward contracts for molasses and increased CPG receivables, but is expected to stabilize around ₹1,100 crores by year-end.

Global and Domestic Market Outlook

The global sugar market is expected to remain in a mild surplus through 2025-26, with raw sugar prices currently around $0.16 per pound. Domestically, India's production reached 25.7 MMT by mid-July, with closing stocks estimated at 5.5 MMT. Management remains optimistic about the upcoming season due to favorable monsoon spells, which have positively impacted cane growing states like Maharashtra and Karnataka.

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